Organisation: Friends Provident
Shares in Friends Provident, 'the not big enough insurer' (The Guardian
6/7), made their stock market debut on Monday at the lower end of the
predicted range but amid institutional demand reported to be at least
three times oversubscribed.
But, while 1.7 million policyholders who pocketed windfall gains
following the flotation of the 170-year-old group has something to smile
about, media coverage of the UK's largest IPO so far this year was far
Indeed this demutualisation story was largely covered by the City beat
in a way that was neither friendly nor provident in its view of the
The fact that Friends Provident is set to enter the FTSE 100 did little
to dampen the negative zeal of commentators, who variously described the
flotation in a depressed market as a 'drab affair' and surrounded by
gloom at a 'pig-ugly time'(The Guardian 6/7).
Amid a plethora of negative sinking headlines, analysts were divided
over the prospects of Friends Provident in the run up to Monday's debut
and whether customers should hold on to their windfall shares, buy more
or take the money and sail away.
Dropping the anchor on the whole flotation was The Telegraph Online,
which likened the insurer to a 'boat in a storm, chugging its way to the
stock market' and there were few correspondents willing to launch the
demutualisation into a fair wind.
Almost alone, thisismoney decided Friends Provident has 'captured the
public imagination' while The Daily Telegraph said that in the current
market, the flotation 'must count as a success' (7/7).
Chief executive Keith Satchell battled against opinion that the company
would not be able to hold its own in an increasingly competitive market
but his comments were mainly lost in the general malaise and the The
Guardian predicted its 'short-lived independence'.
The almost unanimous view was that the company, originally set up as a
friendly society by the Quakers, would now become a takeover target.
Whether there are choppy waters ahead remains to be seen but, if there
is a shark attack looming, it will be those shareholders who kept faith
with Friends Provident who could be having the last laugh.
Analysis and commentary by Echo Research. More information can be found